Instruction Manual On Outward Processing Document last ... - Revenue

[Pages:16]Tax and Duty Manual

Outward Processing

Instruction Manual On

Outward Processing

Document last reviewed October 2023

This Manual provides a guide to the interpretation of the law governing Outward Processing. This is set out in Council Regulation (EU) No. 952/2013 (the Union Customs Code), Commission Regulation (EU) No. 2015/2447 (the Implementing Regulation), and Commission Regulation (EU) No. 2015/2446 (Delegated Regulation).

Published by Authorisations and Reliefs Unit, Customs Division, National Policy and Procedures Branch Queries: Email: revcep@revenue.ie

The information in this document is provided as a guide only and is not professional advice, including legal advice. It should not be assumed that the guidance is comprehensive or that it provides a definitive answer in every case.

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Table of Contents

Definitions ...........................................................................................................................................3 1. Introduction ............................................................................................................................4

1.1. What is Outward Processing ................................................................................................4 2. Application for Authorisation..................................................................................................4

2.1. Application Procedure ..........................................................................................................4 2.2. Division/LCD Report on New Applications ...........................................................................5 2.3. Restrictions on the use of outward processing ....................................................................5 3. Types of Authorisations...........................................................................................................5 3.1. Authorisation covering only one Member State ..................................................................5 3.2. Authorisation covering more than one Member State ........................................................6 3.3. Retrospective Authorisation.................................................................................................6 3.4. Application for an authorisation based on a customs declaration (Simplified

Authorisation).......................................................................................................................7 4. Issue of a new Authorisation...................................................................................................9

4.1. Renewal of an Authorisation ................................................................................................9 4.2. Amendment to an Authorisation .........................................................................................9 5. Entry of goods to the procedure ...........................................................................................10 5.1. How are goods entered to OP ............................................................................................10 5.2. Automatic verification through AES ...................................................................................10 6. Discharge of goods from the procedure ...............................................................................10 6.1. How are goods discharged from OP ...................................................................................10 6.2. Triangulation ......................................................................................................................11 6.3. Monitoring/Checking of Authorisations .............................................................................11 7. How is the duty calculated? ..................................................................................................12 7.1. Calculating Duty relief ........................................................................................................12 7.2. Repairs................................................................................................................................12 7.3. Good Repaired Free of Charge ...........................................................................................12 7.4. Goods sent to UK for repair................................................................................................12 8. Standard Exchange................................................................................................................14 8.1. Standard Exchange with prior importation ........................................................................15 8.2. Equivalence ........................................................................................................................15 9. OP and Inward Processing.....................................................................................................15 10. OP for certain textile products ..............................................................................................16

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Definitions

In the context of this Manual:

(i) "Main Processed Products" means the processed products for which the authorisation for outward processing has been granted.

(ii) "Goods in the unaltered state" means goods in the same condition as when they were placed under the OP procedure.

(iii) "Import Duties" means: a) Customs Duties b) Charges having equivalent effect to Customs Duties c) Import charges provided for under the common agricultural policy or under specific arrangements applicable to certain goods resulting from the processing of agricultural products.

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1. Introduction

1.1. What is Outward Processing

Outward Processing (OP) is one of a number of procedures provided for in EU legislation which are referred to collectively as Special Procedures. It allows goods to be exported outside the EU for processing and then re-imported back into the EU. The import duty will be based on the cost of the processing operation undertaken outside the customs territory of the Union.

2. Application for Authorisation

(UCC Articles 211)

2.1. Application Procedure

(UCC Article 22)

The trader must use the Trader Portal to submit the application and must also have a valid ROS certificate. You will find information about the Customs Decision System and the Trader Portal on the Revenue website. The application will only be accepted upon receipt of all relevant information.

Once all the relevant information has been supplied and the application formally accepted, the time frame for taking a decision begins. Under the UCC a decision, whether favourable or negative, must be made within 30 days from date of acceptance of the application. The option to extend the time limit to make the decision is available if it is found that further time is needed up to a maximum of 30 days.

On receipt of an application Authorisations & Reliefs Unit will carry out the following tasks:

Check that all of the necessary information to process the application has been supplied by the trader;

Where additional information is found to be required the trader will be contacted to provide same.

The application is formally accepted upon receipt of all relevant information.

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2.2. Division/LCD Report on New Applications

On receiving a copy of the application from Authorisations and Reliefs Section, the Division/LCD should contact the trader and arrange a meeting to examine the application and to explain to the trader the obligations which must be fulfilled by anyone availing of OP. The precise nature of the processing operation, the accounting procedures used, the rate of yield and the approved means of identifying the Union goods in the processed product must be examined. The importance of observing the authorised limits for quantities and values and the time limit for re-importation should be clearly pointed out during this meeting. It should be established that the applicant has a copy of the Trader Guidelines on Outward Processing or has access to them on the Revenue website. Where the applicant is a company, a senior executive in charge should be consulted to ensure that management are aware of their obligations.

The report should then be completed including a recommendation as to whether or not the authorisation should be granted. Additional notes may be attached if required. The completed report should be sent to Authorisations and Reliefs Unit as soon as possible and, in this regard, it should be borne in mind that a decision on issuing the authorisation must be made within 30 days of acceptance of the application.

2.3. Restrictions on the use of outward processing

(UCC Article 259).

Outward processing may not be allowed for any of the following Union goods:

(a) goods the export of which gives rise to repayment or remission of import duties.

(b) goods which prior to export, were released for free circulation under a duty exemption or at a reduced rate of duty by virtue of their end use, for as long as the purposes of such end use have not been fulfilled, unless those goods have to undergo repair operations.

(c) goods the export of which gives rise to the granting of export refunds;

(d) goods in respect of which a financial advantage other than refunds referred to in point (c) is granted under the common agricultural policy by virtue of the export of those goods.

3. Types of Authorisations

3.1. Authorisation covering only one Member State

This type of authorisation will allow the holder to avail of OP only in the State in which it was issued. All applications, including those for renewal or amendment of existing authorisations, must be submitted by using the Trader Portal using the link in section 2.1.

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3.2. Authorisation covering more than one Member State

(Article 260,261 of IA)

An authorisation may be issued which will allow goods to be entered to OP in more than one Member State. An application for this type of authorisation is submitted in the Member State where the applicant's main accounts are held.

All applications for these authorisations in Ireland should be made through the Trader Portal. Authorisations and Reliefs Unit prepares a draft authorisation which is communicated to the authorities in the Member States in which the authorisation will be valid. This draft will include the controls required by the Division/LCD. Authorisation and Relief Unit will issue the authorisation on receipt of agreement by the other Member States or, after 30 days, if no objections are received.

Responsibility for control of the authorisation rests with the Irish Administration. Record keeping, INF details, and any other relevant information must be held by the holder of the authorisation.

In the case of applications where the main accounts are held in another Member State, the draft authorisation is forwarded by the Member State to Authorisations and Reliefs Section. This draft is forwarded to the Division/LCD where the Irish trader is based. This draft should be examined in a timely fashion as the authorisation may be issued by the other Member State if no objection is received within 30 days.

The Division/LCD should contact the trader and arrange a meeting to examine such matters as the premises where the procedure will be carried out, the accounting procedures used and to explain to the trader their obligations regarding this OP authorisation. The Division/LCD may, if they consider it necessary, require that security be put in place with separate conditions agreed in respect of the Irish trader. However, responsibility for control of the authorisation rests with the issuing Member State. On receipt of a positive recommendation from the Division/LCD, Authorisations and Reliefs Unit will inform the Member State that Ireland has no objection to the issuing of the authorisation.

3.3. Retrospective Authorisation

(UCC Article 211(2) Art 172 DA)

A retrospective authorisation may only be issued in exceptional circumstances. Details of these circumstances must be submitted by the trader and examined before any retrospection can be considered. The period of retrospection, either for a new authorisation or amendment to an existing authorisation, may not extend beyond one year before the date that the application for authorisation or amendment was accepted. Certain sensitive goods can only receive retrospection for three months.

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Retrospective authorisations are only possible where all the following conditions are met:

(a) There is a proven economic need.

(b) The application is not related to attempted deception.

(c) The applicant has proven based on accounts or records that:

(i) All the requirements of the procedure are met.

(ii) Where appropriate, the goods can be identified for the period involved.

(iii) Such account or records allow the procedure to be controlled.

(d) All the formalities necessary to regularise the situation of the goods can be carried out, including, where necessary, the invalidation of the customs declarations concerned.

(e) No authorisation with retroactive effect has been granted to the applicant within three years of the date on which the application was accepted.

(f) An examination of the economic conditions is not required (except where an application concerns renewal of an authorisation for the same kind of operation and goods ? see point (h)).

(g) The application does not concern the operation of storage facilities for the customs warehousing of goods.

(h) Where an application concerns renewal of an authorisation for the same kind of operation and goods, the application is submitted within three years of expiry of the original authorisation.

Regarding point (e) retrospection will only be allowed once for the same procedure, e.g. if a trader applies for an IP and an OP procedure the 3-year period will apply to each of the applications.

3.4. Application for an authorisation based on a customs declaration (Simplified Authorisation)

(Article 163 DA)

Traders who only occasionally enter goods to OP may opt for a Simplified Authorisation in place of the standard Authorisation. This simplified procedure may be used for the following operations:

Processing operations concerning repairs, including standard exchange without prior importation.

Release for free circulation after outward processing using the standard exchange system with prior importation.

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Release for free circulation after outward processing using the standard exchange system without prior importation, where the existing Authorisation does not cover such a system and the customs authorities permit its modification.

Release for free circulation after outward processing if the processing operation concerns goods of a non-commercial nature.

For application to use the simplified procedure the declaration must be accompanied by a completed Form PO2, which must be stamped by Revenue at the point of export.

AES Customs declaration system

o D.E. 11 09 001 000 - 21

o D.E. 11 09 002 000 - 00

o D.E. 12 02 008 000 ? 00100

o D.E. 12 02 009 000 ? "Simplified Outward Processing"

The simplified authorisation may not be used where equivalence is involved, where sensitive goods are concerned, or where processing will take place in more than one Member State.

Retrospection is not allowed for commercial goods in simplified authorisations.

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